According to The National Landlords Association (NLA), “Housing benefit tenants are set to lose out on private rented homes as landlords look to tenants less prone to missing rental payments, in order to minimise the impact of last year’s Budget.” In their research, the NLA have suggested that investors will make some changes to ease the new rules. The research also showed that six in ten landlords will feel the financial effect of the decision to remove the mortgage interest relief meaning reduced profitability. In order for landlords to recover costs, the NLA say one in five of them are likely to avoid renting to higher-risk tenants, such as those receiving housing benefits.

In a previous blog, our CEO Ken McEwan stated that “Many landlords in Scotland also face uncertainty with proposed changes in the Private Housing (Tenancies) Bill, where the changes only appear to be based on improving tenant rights with absolutely no consideration for the financial risks and challenges faced by landlords from rogue tenants.” Read more about the blog here.

The findings from the NLA, combined with the predictions by Ken, show that tenants are finding it more and more difficult to find accommodation in the private sector as landlords are having to find ways to recover their costs and prevent any further financial losses, and one solution is to stop renting to higher risk tenants. Tenants on housing benefits are typically viewed as riskier because of the high number of incidences where they missed rental payments resulting in landlords taking tenants to court for eviction.

The NLA added that the removal of mortgage interest relief, combined with the government’s benefits freeze and the fall in social housing would “create a perfect storm whereby some tenants will struggle to find any sort of housing at all”.

Overall, these are worrying findings for a large group of tenants in Scotland. It is increasingly difficult to access social housing and they rely on the private sector for a home.

Housing benefit tenants set to lose out on private rented homes was last modified: June 7th, 2016 by Wai Ying Ta